It seems like if you turn on CNBC or Fox Business the last few days that the sky is falling. The word “recession” is being used more than any other word if I am not mistaken. Even more than the word “tapering” or the words “interest rate hike”. I have several friends of mine who have asked me since the June lows “what do I do” and my response is 100% of the time “dollar cost average for as long as possible”. One person has $28k sitting in a checking account with no investments. I told them to withdraw $1k every month and pour it into VOO or SPY until they are down to $5k in checking. We can all disagree on if it would be better for them to just stick $23k of checking into VOO or SPY right now…
My other friend is already heavily invested. He is like most people down about 18% YTD and tells me my advice of the past years “dollar cost averaging” is not cutting it for him. I feel bad he is down 18% YTD, but so is almost everyone else.
Tell me why, if it is, that DCA is wrong. I think it is the best way to invest, and call me evil in bad times like this year, but it just is the best possible route. Both of my friends made me feel small today because they are certain we are going to have a 20% dip thanks to some of the talking heads out there saying things like the soon to come rate hike will lower stocks.
Tell me – is this time around different? Should we have all sold in winter when we began to see slippage in the S&P 500?
My current portfolio:
68% VOO ($21,000)
8% TSLA ($2,470)
7% TQQQ ($2,100)
The remaining 17% is in cash ($5,250) right now. Should I myself sell everything and wait for a dip? If I do this I will lose out on my dividends payments to come in many weeks for VOO… My one friend said it would be wise to not VOO long term but instead buy the last day I can every few months to get the dividend? Please give me advice.
Leave a Reply